Dell ditches public cloud service for partner scheme

Own-brand OpenStack hosting to be replaced by partnership with smaller companies – all managed by Enstratius.

Having been teasing an
OpenStack-based public cloud since the end of last year, yesterday
Dell announced a change of strategy. Instead of providing cloud
hosting themselves, the company will partner with several smaller
suppliers, becoming a “central point of solution integration and
control”.

This is a considerable departure from Dell’s existing
strategy, which was to provide IaaS hosting powered by VMware
vCloud. A new OpenStack-based product was due to be made generally
available at the end of the year, distinguished by a generous
service-level agreement.

The new strategy is a move away from being a direct
competitor to AWS and its ilk, instead becoming a middleman to
smaller brands. By providing access to a diverse range of companies
and products – all manageable by Dell’s Enstratius software – it
may succeed in attracting customers looking for a known brand, but
put off by the threat of proprietary lock-in.

Nnamdi Orakwue, VP of Dell’s Cloud division, said in
a press release that the new program would offer “a choice of
providers, flexibility and interoperability across platforms and
models, the ability to compare cloud economics and workload
performance, and a cohesive way to manage all of it”.

However, it could also be seen as a retreat from a
market increasingly dominated by AWS and, perhaps, less profitable
than it first appeared. Rackspace earlier this month reported
lower-than-expected earnings, speculated to be linked to the
company’s aggressive price cuts.

The move may provide long-term benefits to Dell, but
it likely means throwing out years of investment:
TechCrunch reported that a number of layoff notices were sent
to the 300-person Dell Cloud team. Dell declined to comment on the
matter.